Bill C-474 (Historical)

Transparency of Payments Made by Mining, Oil and Gas Corporations to Foreign Governments Act

An Act respecting the promotion of financial transparency, improved accountability and long-term economic sustainability through the public reporting of payments made by mining, oil and gas corporations to foreign governments

This enactment requires mining, oil and gas corporations to submit annual transparency reports that disclose all payments provided by them or their subsidiaries to a foreign government for the purpose of furthering mining, oil or gas industry activities. It also makes it an offence to fail to comply with this requirement and establishes a penalty for such contravention.

Sitting Resumed

[Sean Casey, Liberal, Charlottetown, PE]

Mr. Speaker, I share the concerns expressed by the member. With Canada being such a significant player in the resource extraction industry worldwide, this is a real opportunity not just to meet and to be level with its international obligations, but to lead. An excellent example was just cited with respect to transparency. The private member's bill brought forward by the member for Scarborough—Guildwood would go a long way toward that goal of Canada being an international leader in transparency and ethical conduct.

Often, it is not good enough just to be level. In our case, there is a real opportunity to lead. This is an opportunity that should be seized both with respect to the initiatives that emanated from the G8 and with respect to the initiatives contained in the private member's bill, Bill C-474.

[Sean Casey, Liberal, Charlottetown, PE]

Mr. Speaker, I am pleased to add my voice to the debate on Bill S-14, an act to amend the Corruption of Foreign Public Officials Act.

This bills makes six much-needed amendments to the Corruption of Foreign Public Officials Act. First, it would remove the words “for profit” from the definition of business so that bribes involving non-profits and charities are included in the act.

Second, it would increase the maximum sentence of imprisonment applicable to the offence of bribing a foreign public official, from the current maximum of 5 years in jail and unlimited fines, to 14 years in jail and unlimited fines.

Third, it would eliminate the exception contained in the act for what are called “facilitation payments”. These are payments for carrying out acts of a routine nature. That exception would be eliminated.

Fourth, it would create a new offence relating to books and records, and the bribing of a foreign public official or the hiding of that bribery.

Fifth, it would establish nationality jurisdiction that would apply to all of the offences under the act, so that all Canadians, permanent residents, Canadian companies, etcetera, can now be charged for crimes taking place in foreign countries.

Finally, it would designate the Royal Canadian Mounted Police as the agency with the exclusive ability to lay charges associated with the act. This specifically refers to the RCMP international anti-corruption unit.

These changes, as we have already heard, are meant to bring Canada in compliance with the OECD conventions on combatting bribery of foreign public officials in international business transactions, which this country ratified in 1998, as well as other international obligations. The Liberal Party will be supporting this bill, as it did through the Senate.

Despite widespread calls for Canada to step up its foreign anti-bribery measures, during the seven years the Conservatives have been in power, they have only begun to deal with the shortcomings of this statute that they propose to fix by this bill.

Bill S-14 updates Canada's anti-corruption laws and puts them in line with Canada's international anti-bribery convention commitments made with the OECD, as well as others made through the United Nations and the Organization of American States. In addition to meeting our commitments to various anti-bribery conventions, Bill S-14 allows Canada to be a country that demonstrates a high level of ethical standards for other countries.

There are important preventative measures that governments should be taking to ensure the RCMP has the resources to successfully investigate cases that are relevant to Bill S-14. A private member's bill, Bill C-474, proposed by the Liberal member for Scarborough—Guildwood, is one such measure, but sadly it is being opposed by the government.

Bill C-474 would attempt to make revenue transparency the norm in resource extraction industries. This transparency would allow for Bill S-14 to be more preventative instead of reactive.

Bill S-14, presently before the House, would result in more prosecutions and convictions for foreign bribery offences. Canada is a bit of a laggard in this regard, even accounting for size differences in population and economy. Canada falls behind, having only prosecuted three cases compared to other major economies. There were 227 cases prosecuted in the United States, 135 in Germany, 35 in Switzerland, 24 in France, 18 in Italy, and 17 in the United Kingdom, as examples.

This bill, as was indicated, would amend the Corruption of Foreign Public Officials Act, which was passed in 1998 and came into effect the next year. Its passage meant that Canada ratified the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. The Corruption of Foreign Public Officials Act also implemented Canada's international obligations under the United Nations Convention against Corruption and the Inter-American Convention Against Corruption. In 2002, there were several technical amendments that were made to the act because of amendments to the relevant sections of the Criminal Code.

The OECD working group on bribery has produced at least three follow-up reports on Canada's progress. The phase 1 report was released in July of 1999, the phase 2 report in March of 2004, and the phase 3 report in 2011. Each one commented on Canada's progress and set out areas where Canada needed to improve to stay on par with its international neighbours.

The phase 1 report, in 1999, was focused on the implementation of the Corruption of Foreign Public Officials Act. It was almost entirely positive. It stated that the working group was of the opinion that the Canadian act met the requirements set by the convention. It did address the issues that might need to be discussed during the phase 2 evaluation in 2004, including the exemption for “acts of a routine nature”, which are the facilitation payments that I referred to earlier; the effectiveness of the penalties, including monetary sanctions; and the lack of the nationality jurisdiction. All of these things that were referenced in that phase 1 report, in July 1999, are now contained in Bill S-14.

Five years later, the recommendations contained in the phase 2 report included the following: giving a coordinating role to one of the agencies responsible for the Corruption of Foreign Public Officials Act's implementation; reconsidering the subsection 3(4) exemption for facilitation payments, which I referred to earlier; redefining the word “business” in section 2 to include “not for profit”; and reconsidering the decision to not establish nationality jurisdiction for the crime of bribing foreign officials. Again, all of these recommendations from the working group have been included in the provisions of Bill S-14.

In 2008, the RCMP formed an international anti-corruption unit, which became responsible for investigating bribes of foreign officials. It has two seven-man teams, one in Ottawa and one in Calgary, the latter being the centre of Canada's resource extraction industry. They work with the Public Prosecution Service of Canada, which does the prosecutions in foreign bribery cases. As of May of this year, there are 35 ongoing foreign bribery investigations. There have been only three convictions against companies in the oil and gas sectors, with fines of $9.5 million and $10.35 million in two of those cases.

As the House is aware, one was the case of Griffiths Energy International, an engineering company that had an inappropriate financial relationship with the wife of the former ambassador from Chad. Another case was Niko Resources, for bribing a Bangladeshi official. SNC-Lavalin, Canada's premier engineering firm, was recently convicted on bribery charges in Bangladesh and has been barred from competing for World Bank contracts for the next decade.

In 2009, an attempt to implement similar changes to those that are in the bill before us today passed at second reading. It was at committee stage when it died, after the Prime Minister prorogued Parliament in December of 2009.

That brings us to the phase 3 report of the OECD working group from a couple of years ago. This report again found problems in several areas. These included only counting bribes for the purpose of gaining a business advantage for profit. These sanctions were not effective, proportionate and dissuasive. The extraterritorial jurisdiction issue, which I mentioned in connection with the nationality jurisdiction, only applies to bribery carried out overseas if there is a real and substantial link to Canadian territory. Considerations of national economic interest, the potential effect upon relations with another state, or the identity of the natural or legal persons involved, are only prohibited if improper.

In 2011, the Transparency International Global Corruption Report noted that Canada fell in the lowest category of countries since it had little or no enforcement in terms of following the OECD bribery standards and was the lowest ranked member of the G7.

As indicated, the measures contained in Bill S-14 are long overdue and are needed to bring Canada in line with its international obligations. They are measures that the Liberals will be supporting.

Fighting Foreign Corruption Act

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, unfortunately our track record on this file is not as robust as one would like.

In 2011, the Prime Minister was invited to sign a transparency initiative, which was a robust transparency initiative by his colleagues in the G8, and he declined to do so. As a consequence, there was no statement that came out of the G8 which would have, at that point, moved the Cardin-Lugar amendment up everyone else's legislative agenda.

Here we are two years later. It is the same issue. It is even more important now. We have had a series of embarrassing incidents for Canada.

I do not know about other members, but I do not particularly feel good about seeing Canadian companies engaged in bribery and other kinds of scandals.

The government has had two years to kind of catch up to the rest. To this point, it has not done anything except for Bill S-14. I do not want to be entirely negative here. There have been some discretionary educational initiatives that the government has tried to put forward.

Sometimes we just have to bring the hammer down and the government has thus far declined to do that. The United States has brought the hammer down. The U.K. is in the process of bringing the hammer down. The EU has brought the hammer down. Australia is in the process. When we put all that together, what we have is, in effect, 85% of the extractive sector that will have a robust legislative environment if in fact we join in.

It is hypocritical on our part to say that those countries that are subject to a lot of corruption should clean up their act, if in fact we have legislative holes in ours. Right now Canada is the big hole in the fence. We need to rectify that. It can be rectified in this chamber and quite quickly. The only way, in my judgment, that is done is not only in passing Bill S-14, but in passing Bill C-474 as well.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, I thank the member for Cambridge for that enthusiastic applause and possibly one or two others as well. However, I would be surprised if the member for Cambridge and others actually remembered what I was talking about two weeks ago when question period interrupted the profundities of my speech.

Let me say that we support Bill S-14. We think it is a good bill insofar as it goes. Regrettably, we do not think it goes very far. The thrust of my speech was to link Bill S-14 with Bill C-474, the sunshine bill sponsored by me, which would actually be the evidence base for Bill S-14. Bill S-14 becomes far stronger if one brings in the evidence. As such, one would actually succeed in getting prosecutions.

In my previous remarks I talked about how aggressive the Americans are with respect to prosecutions in corruption. The numbers are something in the order of, for the same period of time, 277 prosecutions in the United States for corruption whereas in Canada we only had two. In this respect, the Americans are world leaders and not only world leaders in terms of the aggressiveness with which they prosecute companies that engage in corrupt activities. They do not shy away from prosecuting some of the most recognized companies in the world that trade on U.S. stock exchanges. Therefore, not only is their prosecution aggressive but their legislative agenda is also aggressive.

They have passed the Cardin-Lugar amendment to the Dodd-Frank bill, which basically states that if mining or extractive companies secure a concession they would have to disclose to the U.S. Securities and Exchange Commission who they have paid, how much they paid, when they paid it, the frequency of the payments, the currency of the payments, and all other considerations in securing that concession. My sunshine bill, Bill C-474, mirrors that legislation. It is something that both President Obama and Prime Minister Cameron want to achieve at the next G8.

I had summarized all of this and talked about the decline in Canada's reputation and went on to discuss the incongruity of the government's position to, on the one hand, support S-14, which we think is a good idea, and to be opposed to the sunshine bill, Bill C-474, on the other.

My newest seatmate as of today, my colleague from Mount Royal, would say that there is a seeming incongruity with the government's position in supporting Bill S-14. It says that it wants to combat corruption, yet by opposing Bill C-474 it is saying that accountability is not important. I cannot reconcile the disparity easily. Perhaps it lies in the simple fact that Bill C-474 is not a Conservative bill. It is a bill that the parliamentary secretary and other Conservatives have claimed would overburden Canada's extractive sector, leaving our companies at a competitive disadvantage and so forth, when this was in fact contradicted by witnesses at the foreign affairs committee.

I have to take note that a number of mining companies and mining associations have come out and said that they not only support Bill S-14 but they certainly support the principles and indeed the mandatory aspects of Bill C-474. Some Canadian companies have enthusiastically taken up the issue of corporate accountability. Business leaders, such as the president of the Mining Association of Canada, Pierre Gratton, believes that corporate transparency mechanisms are not only the right thing to do but they are also good for business.

All of the investors agree. The last thing that investors want is to be embarrassed as they see their investments decline in value on the front pages of The Globe and Mail. Therefore, industry is on side with Bill C-474. It is certainly on side for Bill S-14. Most responsible extractive companies are on side with the EITI initiative. These are good insofar as they go.

Canada as a nation supports the EITI transparency international initiative, but it has not joined. The Government of Canada has declined to join the EITI, which is quite regrettable because we are the country that is of foremost importance with respect to the extractive sector.

Business, in this instance, is actually ahead of the government in terms of a desire to impose a mandatory regime upon itself. Not only is it a good thing to do, it is good for business. Joe Ringwald of Selwyn Resources said that it is important to become a leader in this and to gain reputational advantage. He also said that Canada has become a laggard on this issue.

Industry has generally taken a favourable tone to this legislation and a number of players want transparency, particularly with many of the projects where there is money going to foreign governments and sometimes more money going to foreign governments than to shareholders. The idea of financial transparency has both public and private sector support. As I say, the industry is certainly on side. The NGOs, as might be expected, are on side. Civil society is on side. I would dare say the public is on side. The only issue that we appear to have here is that the government does not want to legislate in this area.

It is going to be a very difficult issue at a difficult time for the Prime Minister when he goes to Great Britain for the G8. Clearly, Prime Minister Cameron wants a clear, mandatory statement with respect to legislation on the extractive sector. He wants other issues agreed on as well, as does President Obama, who is highly supportive of the Cardin-Lugar amendment. They are binding their own companies to this initiative.

Starting September 1, any company that trades on the U.S. stock exchange will be bound by this legislative initiative. The irony is that if we want to find out about a major gold company, Barrick, for example, including who they pay and what they pay for their concessions around the world to foreign governments, including the foreign government of Canada, we will have to go to the New York Stock Exchange to the Securities and Exchange Commission and look at the published reports to see what and who got paid. It seems to me that Canada as a nation, given its position as the number one mining country in the world, should be a little bit ahead of the curve, instead of behind it.

Internationally, the Prime Minister is going to have to do some tap dancing in Northern Ireland, and explain to his colleagues at the G8 why Canada is not supportive of the sunshine bill.

I see that my time is just about finished. I would like to say in conclusion that the incongruity of the government's position in presenting Bill S-14, which is a good bill, but not supporting Bill C-474 is something that the Prime Minister is going to have some difficulties explaining when he meets with his colleagues this month in Northern Ireland.

Transparency of Payments Made by Mining, Oil and Gas Corporations to Foreign Governments Act

[Scott Reid, Conservative, Lanark—Frontenac—Lennox and Addington, ON]

Mr. Speaker, it is my pleasure to contribute to the debate on Bill C-474. This proposed legislation focuses on Canadian extractive companies, Canadian mining companies in other words, that are operating internationally. Its main objective, which I do not think anyone could object to, is the improvement of financial transparency, accountability and economic sustainability through public reporting of any payment that Canadian mining companies or Canadian oil and gas companies make to foreign governments.

This is important because Canada is the world's largest investor in extractive industries, at least if we leave oil and hydrocarbons aside. We have investments in roughly 8,000 properties and around 100 countries around the world. Nearly 20% of Canada's foreign investments are in the extractive sector and 60% of the world's publicly listed mining corporations are listed on Canadian stock exchanges.

My own interest in this issue comes from the fact that I am the chair of the human rights subcommittee of the foreign affairs committee. We have done some work into human rights issues that relates to mineral extraction. In some cases, this involves mineral extraction, where Canadian companies either are involved, or potentially could be involved in the future. My colleague, the member for Mount Royal, mentioned the example of looking into the Bisha mine site in Eritrea which is operated by a Canadian company. There are other examples as well.

This is important because it is not always easy for Canada to have an influence on international human rights issues. We are not as influential in the hard power way as some of the other countries in the world: the United States, Britain, France and China. However, when it comes to the power of our investments in the international extractive sector, we are the most significant player.

Having said all of that, there are certain human rights issues that strike me as being particularly important. They have to be taken into account when one is dealing with these kinds of investments. For example, there is the issue of property rights and the land tenure of people who live on the land on which a potential mine might be placed. This can happen even in my own riding. Here in Canada we have had mineral exploration on property where the individuals who have lived for their entire lives do not have the underground rights to their own property and this creates conflict. However, in Canada we have expropriation acts; we have the rule of law. This is not true everywhere. Canadians investing in countries that do not have these rules have to find a way of dealing with the fact that these countries often do not have a proper mechanism for dealing with this kind of thing. In some cases, this includes issues that relate to indigenous rights in those countries. We have an obligation to deal with that.

We have to deal with the fact that in some countries the population is not truly free. There is the danger that we could find ourselves operating in a professional manner, but in an area where the population is enserfed, where there is forced labour. We could find ourselves, if we are not careful, complicit in some kind of human rights abuse. This is of course a major concern to this government, and to any responsible Canadian.

There are these considerations, and some others that are not truly human rights issues, but clearly they are human rights in the broader sense. The destruction of the environment, which can happen from mining, is a real worry. For example, one great tragedy that has occurred, which we could say is a human rights issue, has been the pollution of rivers with arsenic as a result of the gold mining industry. It is for this reason that the world community—and Canada has been a key participant in this—has adopted rules and practices relating to the use and monitoring of arsenic in mineral extraction to make sure this kind of harm does not occur. It can have disastrous implications. These are, in the broad sense, of course, human rights implications.

One issue to be concerned about is how we deal with foreign bribery, kickbacks and so on. The intent of Bill C-474 is to deal with illicit payments to officials in foreign jurisdictions in order to get access to resources or for favouritism.

The way that Bill C-474 aims to do this is by requiring Canadian extractive companies and their subsidiaries that are incorporated under Canadian or provincial law to submit to the Minister of Foreign Affairs and the Minister of Natural Resources an independently audited annual transparency report. This is all quite reasonable, but there are some problems that need to be addressed with regard to this bill.

First of all, Bill C-474 pre-empts the work currently under way involving Canada's international partners in the G8 in preparation for the G8 leaders summit, which is occurring this summer. The issue of transparency in the world's extractive industries is expected to be a key item at the G8 summit.

Second, Bill C-474 also pre-empts the collaborative work currently under way involving industry representatives and NGOs, work that is scheduled to be completed this summer as well. The revenue transparency working group is putting together a framework for mandatory reporting of payments that will ensure that we are in line with our international partners' regimes to ensure, again, that we have strong transparency that does not burden Canadian businesses disproportionately, as compared to our trading partners and competitors, with unnecessary red tape.

Third, there are many international or multilateral initiatives that already exist. For example, there is the extractive industries transparency index, which the government supports. In fact, just last October, Prime Minister Harper announced $20 million over a four-year period in support—

[Irwin Cotler, Liberal, Mount Royal, QC]

Mr. Speaker, I rise today to address Bill C-474, the transparency of payments made by mining, oil and gas corporations to foreign governments act.

I would first like to commend the sponsor, my colleague representing Scarborough—Guildwood, for his persistence and dedication involved in seeing this legislation through Parliament these past several years.

Bill C-474, the sunshine bill, as my colleague has properly characterized it, would compel Canadian-based extractive companies operating abroad to disclose all payments made to foreign governments after having been reviewed by a qualified independent auditor. The disclosures would be made to the Minister of Natural Resources who would then ensure that they are made available online for public viewing. If it is discovered that a company has failed to disclose a payment, it would be deemed guilty of an offence and face a fine upon summary conviction of up to $5 million.

These provisions will not only help to promote greater transparency and accountability in Canada's extractive sector, the sunshine aspect, as my colleague put it, but they will also discourage the kinds of illicit payments to foreign governments, especially those that routinely violate human rights, the disinfectant aspect, that have long been used to gain access to resource reserves.

To be clear, this legislation is not an indictment of all Canadian extractive companies, nor will this legislation stifle business and trade. As Pierre Gratton, president of the Mining Association of Canada, stated last year with respect to payment disclosures:

I think by and large it's not only seen as the right thing to do, but it's starting to be seen as actually good business to have these payments to government published.

This legislation is about combatting corruption and ensuring corporate social responsibility and accountability. Admittedly, many Canadian companies already have excellent track records in this regard, but as my colleague pointed out, this is now a question for Canada's reputational integrity and to make these countries even more attractive to investors. There is also precedent for this kind of legislation in other jurisdictions, including the U.S. and the EU, as has been pointed out, as well as broad support from civil society organizations in Canada. I am therefore pleased to support this bill and trust that it may enjoy the full support of the House.

Canada has already established itself as a world leader in the extractive industry. This distinction, however, carries significant responsibility in terms of ensuring that our companies conduct business abroad in an ethical manner and with the utmost respect for human rights. Regrettably, this has not always been the case, as my colleague has pointed out, which is largely why this bill is being brought forward.

As well, throughout this parliamentary session, the House Subcommittee on International Human Rights, of which I am vice-chair, has heard from witnesses as to the activities of Canadian extractive companies in countries around the world. Regrettably, much of the testimony has given us cause for concern.

For example, this past October, the subcommittee had the pleasure of receiving Neri Colmenares, a member of the Philippine House of Representatives and an authentic human rights hero in his country. In his testimony, Mr. Colmenares explained how transnational corporations operating in his country, including Canadian mining company Toronto Ventures Incorporated, TVI, have hired paramilitary groups for security, which he dubbed “a recipe for disaster”. These “unwieldy elements”, as he put it, have reportedly carried out routine violations of human rights dating back many years.

In a recent example, Mr. Colmenares described how local media were detained and held hostage by such a paramilitary group hired by TVI. This is but one example Mr. Colmenares shared with our subcommittee and in several meetings that I had with him. Indeed, his testimony and similar witness statements only underscore the need for the kind of legislation at hand.

In addition to the Philippines case, the subcommittee has also been inquiring into the state of human rights in Eritrea, which, as members will know, is the most closed society in Africa, dubbed the North Korea of Africa, and is one of the world's most egregious violators of human rights.

This past November, the subcommittee heard testimony from Cliff Davis, president and CEO of Nevsun Resources, another Canadian-based mining company with operations in Eritrea. Mr. Davis repeatedly insisted that all who work at the company's mine, which it co-owns with the Eritrean government, are there of their own free will and are provided with good working conditions, food and accommodations, in accordance with international standards. Moreover, Mr. Davis claimed that his company fully addressed allegations of human rights violations, particularly the use of conscripted labour by an Eritrean government subcontractor employed by Nevsun.

However, in witness testimony before our committee, we heard Nevsun does not know whether conscripted labour is being used or that the company has been repeatedly denied the right to investigate by the Eritrean government-owned subcontractor and now “appears to feel it has no power” and has responded with “quiet acceptance”.

This is precisely the impression I was left with after hearing Mr. Davis' testimony.

When I asked him if he was aware of human rights violations in Eritrea, generally speaking, notwithstanding the public record, he said no. When I asked him if he was ever advised about human rights violations in Eritrea by anyone, he said no. When I asked him if he was aware of human rights violations at the mine site, he said no. When I asked him if he was advised by anyone of human rights violations at the mine site, he said no. When I asked him whether he had ever conveyed to the Eritrean government any concern of any kind about any human rights violations, he said, and I am paraphrasing for reasons of time, “ I do not acknowledge the premise of the question. That is a premise asserted by people outside of our mine site, and there are no human rights violations at our mine site”. In the end, it was, in my view, akin to hear no evil, speak no evil and see no evil.

Simply put, it is unacceptable for Canadian companies to profit while funding and enabling those who violate human rights. I believe that Bill C-474 can help end that practice. The legislation would also serve to advance the principles of transparency and accountability that have already taken root among Canadian companies, while reinforcing the notion in the minds of investors that corporate social responsibility is good business.

I trust that the House will adopt the bill.

[Bob Dechert, Conservative, Parliamentary Secretary to the Minister of Foreign Affairs]

Mr. Speaker, I am pleased to rise today to participate in the debate on Bill C-474, the transparency of payments made by mining, oil and gas corporations to foreign governments act.

Let me state at the outset that our government believes that responsible resource governance practices should include transparency to ensure that the extractive sector sustains economic growth and reduces poverty. Without sound management, natural resource exploitation can lead to increased corruption, poor development outcomes, and at times, the fueling of armed conflict or illicit trafficking.

Openness, clarity and accountability are not only good for the local community but enhance investor predictability and stability. This type of responsible conduct is valued by governments, communities and corporations. This is why it is important to have a solution that works for Canadians, a solution that promotes transparency and good governance and one that respects our Constitution and creates a stable investment environment in Canada and abroad.

Canada is a major player in the international extractive sector, which includes oil, mining and natural gas. This is an important sector for the Canadian economy, our government's top priority. It accounts for 1.6 million jobs and nearly 20% of Canada's GDP. In 2011, Canadian resource companies exceeded $128 billion in outward foreign direct investment. We know that Canadian companies operate overall in a responsible manner, not only here in Canada but around the world. They are instrumental in improving the lives of people in the communities in which they operate.

Let me be clear that our government is not opposed to the objectives of this bill. Indeed, we value transparency initiatives that work for all Canadians. Our corporate social responsibility strategy for the Canadian international extractive sector, or CSR strategy, works for Canadians. It builds host country capacity, promotes widely recognized voluntary international guidelines, provides an independent dispute resolution system through the Office of the Extractive Sector Corporate Social Responsibility Counsellor, and last, facilitates a multi-stakeholder group comprising business, government and civil society to provide practical tools and information on CSR.

Our government continues to innovate with new ways to responsibly advance natural resource governance that works for Canadians. In 2011, at the commonwealth summit, the Prime Minister announced a $25 million contribution for the creation of the Canadian Centre for Extractive Industries and Development. This institution will be jointly operated by the University of British Columbia and Simon Fraser University and will advance best practices in extractive sector technology and management to reduce poverty and protect the environment.

In 2007, the Minister of Finance announced Canada's support for the extractive industries transparency initiative, also known as EITI. Today, Canada is the second largest funder of the EITI multi-donor trust fund, as well as the largest funder of the World Bank's Extractive Industries Technical Advisory Facility. We also host the secretariat of the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development, which convenes developing countries, training partners and donors to discuss and advance issues of mutual concern, such as international standards and best practices in extractive sector management and governance.

As well, let us not forget the Prime Minister's announcement in 2012 of $15.3 million in new funding for the African Minerals Development Centre. The AMDC will deliver guidance and policy advice to African countries on how to manage their extractive sectors responsibly and sustainably.

These are examples of Canadian solutions that work. They encourage extractive companies to make responsible investments, advance transparency and increase accountability. They reinforce Canada's brand as a global leader in this regard. This is why our government advances solutions that bring results not only here in Canada but around the world.

When it comes to advancing transparency and accountability, it is important to bear in mind that we are not the only player in town. At the upcoming G8, all countries will be working together to address this important issue. It is important that we work with our international allies to ensure that we have a strong transparency regime while ensuring that we have a comprehensive framework that does not unduly burden industry. Industry and civil society are also bringing new Canadian solutions to the forefront. There is work under way by Canadian mining companies and civil society to develop a framework for transparent financial reporting of payments to foreign governments.

In July 2012, the Mining Association of Canada, the Prospectors and Developers Association of Canada, Revenue Watch international and Publish What You Pay Canada, signed a memorandum of understanding to develop a framework for the reporting of Canadian extractive companies' revenues to foreign governments on a country-by-country and project-by-project basis. The objective is to create a single reporting framework that would reduce the reporting burden on companies, as well as to simplify the provision of information to all stakeholders.

This is an example of how Canadian industry is stepping up to encourage financial transparency in foreign markets. It demonstrates a constructive consultation for a workable solution. Unfortunately, Bill C-474 is not a workable solution. Bill C-474 tries to impose reporting features taken from other countries, such as the United States and Europe, with little regard to how our system works.

First, Bill C-474 has been presented without, it seems, consideration of how it would actually work under the Canadian Constitution. Our assessment is that the proposed legislation lacks constitutional validity under Canada's criminal law and our federal trade and commerce regulations. Simply put, Bill C-474 does not work under our Constitution. Second, the bill addresses the extraction of natural resources outside of Canada and does not include a domestic reporting regime. Third, Bill C-474 does not recognize the existing consultation in industry trends. Without effective engagement, the bill could result in an undue burden on the extractive sector. Bill C-474 does not work for our industry.

We believe in an approach that works for Canada, for Canadian companies, and an approach that advances transparency and accountability while also increasing economic prosperity and jobs for hard-working Canadians.

While I am standing, I would like to address an issue that I heard from the opposition members earlier today and that I have heard on an ongoing basis, that somehow Canada's international reputation has been going down. They do not cite any data for that. They cite a favoured member of the chattering classes.

I would like to put forward an article from The Toronto Star dated Thursday, May 23. The headline reads: “Canada's international reputation rising” says survey. It continues:

Canada's reputation is improving overseas according to a new public-opinion survey of respondents in 20 countries. Keep that maple leaf patch on your backpack for at least another year. Canada's reputation is improving overseas, according to a new public-opinion survey of respondents in 20 countries. Fifty-six per cent of about 20,000 respondents view Canada favourably, up from 53 per cent last year. The findings are included in a report by the polling firm GlobeScan [which was released yesterday]. Canada's reputation outside its own borders trails only Germany.

Around the world, Canada is the second most favourably viewed country in the world. That is hard data, done by an internationally recognized polling firm that has been doing this on an ongoing basis for 10 years. I understand that the opposition does not want to bring this to the attention of the Canadian people because it does not go along with what they have been trying to tell people for the last couple of years. The facts are that Canada's reputation in the world is going up not down, and that is because we have a responsible and principled foreign policy.

The pollster who did the survey said Canada's reputation has been trending positively since at least 2010, when 51% of the survey respondents had a favourable opinion of Canada. Those are the facts. I hope the opposition will read The Toronto Star. I am pretty sure my hon. friend from Scarborough—Guildwood is a subscriber. He might want to take a look at that article and perhaps respond to it at another time.

[John McKay, Liberal, Scarborough—Guildwood, ON]

moved that Bill C-474, an act respecting the promotion of financial transparency, improved accountability and long-term economic sustainability through the public reporting of payments made by mining, oil and gas corporations to foreign governments, be read the second time and referred to a committee.

Mr. Speaker, I thank my hon. colleague from Winnipeg North for being the seconder to this bill.

It appears we are at the end of a parliamentary week and this has indeed been a week about corruption, I am afraid. I wish it were not so, but it is.

Ironically, today, the government introduced Bill S-14, which is a bill about corruption and we had quite a number of interventions on that bill. Then question period followed and that, too, was, regrettably, about carryings-on about corruption, bribery and things of that nature. Then we were supposed to proceed with Bill S-14 after question period, but the government switched off that bill.

However, my colleague from the NDP raised the issue of the report of the foreign affairs committee where, in fact, it was also a discussion in some manner or other about the use and abuse of aid money in the extractive sectors.

Here we are, at the end of our parliamentary week, talking about bill C-474, which I have suggested be called the “sunshine bill”. The reason we call it the sunshine bill is that sunshine is light on, how shall we say, murky practices. It is light on goings-on that people only suspect.

However, it also has another aspect. Sunshine also has the aspect of killing bacteria. In some respects when we have legislation such as the sunshine bill, I would suggest it would not only shed light on somewhat murky and dubious practices, but it would also kill off some of those murky and dubious practices.

The bill is, as far as I have been able to make it within our legislative framework, a mirror image of the Cardin-Lugar amendment to the Dodd-Frank bill.

Members will recall that in 2008-09 the world went through a pretty significant financial crisis. The major legislative response by the United States was the Dodd-Frank bill. In the Dodd-Frank bill was an amendment made by Senators Cardin and Lugar which said, in effect, that an extractive company operating in a foreign jurisdiction must, within 180 days of its fiscal year end, produce an audited statement to be filed with the Securities Exchange Commission, which discloses all payments it has made in the course of its previous fiscal year, those payments being taxes, royalties, dividends, licence fees, production entitlements, bonuses, provision of infrastructure and other in-kind payments and a variety of other payments that would be appropriate to disclosure.

Insofar as I have been able to make this bill as mirror image as our American friends have done, I have done so.

In the United States, the sanction for failing to file will be delisting from U.S. stock exchanges. Therefore, we can imagine that the Americans are very serious about corruption. Failure to comply means that a company will be delisted from, primarily, the New York Exchange. Its stock will be worth zero. The company will be functus. That is how serious the Americans are about corruption in companies in which it has administrative jurisdiction.

We do not have a national securities regulator. That case was decided about a year ago. I actually applaud the government's efforts to try to create a national securities regulator. Our securities regulation in the country is a joke. There are all kinds of little silos doing various different things. Therefore, I applaud the government's efforts, but those efforts failed. As a consequence, we had to rejig the sanction to be a fine sanction.

Failure to file with the government in a similar fashion as the Cardin-Lugar amendment would, in this instance, attract a fine rather than a delisting from a U.S. stock exchange.

I know the Americans are extremely keen on this legislation. In 2011 or 2012, I am not quite sure in which was the meeting, President Obama raised this matter with his G7 partners. All the partners at the G7 wanted each nation to commit to legislation similar to the Cardin-Lugar amendment. The only nation that resisted was Canada, which is quite regrettable because we are the world centre for the extractive industry. More transactions take place on the TSX than pretty well anywhere else in the world. This is the centre of the world for mine financing, law firms, accounting and geology. We are the best in the world in mining. That is an extremely important industry to us and our nation's well-being. Therefore, we should also be the leaders in an international regulatory environment for the benefit of our nation and the companies that call Canada home. It is good for Canada, for the industry and it is good for our national reputation.

Unfortunately, Canadians are fed up of reading in their national newspapers and other media about various companies that find themselves on the wrong side of bribery allegations, the latest example being SNC-Lavalin, which is by anyone's standard a world-class engineering firm. However, because of bribery convictions in Bangladesh, it has been barred from competing in world bank contracts for the next 10 years. That basically takes SNC-Lavalin, and essentially Canada, out from competing for engineering projects. Officials have been fired and the stock has been hammered.

One can go through quite a number of Canadian and Canadian-based companies such as: the Calgary-based Griffiths engineering company, which recently paid a $10 million fine for an inappropriate financial relationship with the wife of the Chad's former ambassador; Niko Resources another $9 million fine in 2011 for again an inappropriate relationship with a former energy minister in Bangladesh; and Blackfire Exploration Ltd. is having its offices raided by the RCMP.

This is serious stuff. The common pattern is the conviction gets registered, the officials get fired, the stock gets hammered, so there is a bunch of unhappy people and the most unhappy of all are the shareholders. All of us are shareholders in many of these companies because they are all on the TSX and our Canada pension plan has large holdings on many of these companies.

It gets worse than that. Members may or may not have caught an article in the Globe and Mail last year entitled “Canada ranked worst of G7 nations in fighting bribery, corruption”. In the second paragraph it states:

Transparency International, a group that monitors global corruption, put Canada in the lowest category of countries with “little or no enforcement” when it comes to applying bribery standards set out by the [OECD].

Mr. Dent further states that:

—the United States has prosecuted more than 200 companies and individuals, many of them “a veritable who’s who of the corporate world”...

The United States is serious about this kind of corruption and is very serious not only in a legislative fashion but also in a prosecutorial fashion in trying to deal with these allegations and concerns.

The United States, in a comparable period of time, has conducted 227 prosecutions. In a similar period of time, we have conducted two. We are the world centre for mining. Maybe when things go north of the border, we suddenly become a whole lot better than the rest of the world. I suppose we are entitled to believe in our fantasies.

However, the Americans, the British treat and the Europeans treat this very seriously. Unfortunately, the big hole in the legislative fence is right here. This has reputational damage, and it is not only reputation.

I hear my friends chirping over there because they are a little nervous that they have been caught with no legislative response going into the G8 next month.

If Conservatives do not think this is serious to shareholders, if they do not think it is serious to management, if they do not think it is serious to our corporations or our corporate brand, they should think about it in terms of our national reputation.

Positive views of Canada fell most steeply in the United States, Britain and China, according to the BBC World News survey of 20,000 people in 20 countries who were asked if Canada had a mainly positive or negative influence on the world. It is the first time Canada's popularity among its major trading partners has declined since polling from GlobeScan began tracking international sentiment in 2005.

GlobeScan chairman, Doug Miller, said, “the deterioration could hurt Canadian business interests”. He said, “If the conditions persist, it can start to set in more cognitively and become an anchor that weighs down [Canada's] reputation. What countries have found is that it's extremely hard work to regain trust”.

The industry is actually cognizant of this. The industry gets it. Over the last couple of years, I have been meeting quite regularly with industry groups. In many instances they have signed up for EITI, the extractive industries transparency initiative. In many instances they understand that not only is it important that their company have a good reputation, but it is important that their industry have a good reputation and it is important that our nation have a good reputation.

They have conducted on their own, at their own expense, all kinds of seminars, education things and the government has in some respects facilitated some of that discussion with the Vancouver-based organization which is on EITI.

Interestingly, Canada as a nation, unlike other nations like the United States, has not signed on for EITI. We actually cannot hold our own companies to account, even though some of our own companies have voluntarily joined the EITI initiative themselves.

Joe Ringwald, Transparency International Canada representative and an industry representative, said, “It is become important to become a leader in order to gain this reputational advantage”. He also stated that Canada had become a laggard on this industry, that industry in general was taking a favourable tone to this legislation and that there had been a number of industry players who wanted transparency.

The industry, the various other actors, the NGOs and others are stepping up to the plate, but what is really worrisome is that, internationally, we are about to get one more black eye.

At the G8 meeting in June, Prime Minister Cameron wants transparency to be one of the takeaways from that meeting. He wants the rest of the G8 partners to adopt the legislation similar to the Cardin-Lugar amendment. Thus far we are going in with fig leaves.

Bill S-14 is a fig leaf. It is wonderful in so far as getting prosecution, but it is not much good in terms of generating evidence.

I would encourage my colleagues, particularly my colleagues opposite, to support this legislation. This is extremely important to the industry and extremely important for our nation.

Fighting Foreign Corruption Act

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, I appreciate the opportunity to talk about corruption and bribery. It looks like this will be a discussion that we will have all day. We will have this discussion before question period, during question period, after question period and, I dare say, this is not a conversation that will go to go away any time soon.

As I said in my previous interventions, we generally support this bill. The various aspects of the legislation are actually pretty good ideas. We hope the bill will go to committee sooner rather than later, that it will not suffer the fates of a potential prorogation and that we will have an amendment to the Criminal Code, which would enable better prosecution of companies that find themselves in difficult situations with respect to allegations of corruption and bribery.

Canadians are thoroughly fed up with reading about their companies being involved in allegations and convictions of bribery.

I bring to the attention of my colleagues several recent instances. Regrettably we have about one of Canada's premier companies, SNC-Lavalin, which has been banned from bidding on contracts with the World Bank for the next 10 years because of convictions regarding bribery and corruption. Not only has it lost its reputation, it has had to fire a number of its senior executives. It has had to undergo the humiliation of being investigated by the RCMP and other international police forces. Its stock has been hammered, which always gets the attention of shareholders. Niko Resources was fined $9.5 million for bribing a former energy minister also in Bangladesh. Griffiths Energy International was fined $10.3 million for bribing the wife of Chad's former ambassador to Canada.

I do not care to carry on with this laundry list, but these are very difficult times for some of Canada's premier industries and they know they have a problem. As the member for Ottawa Centre indicated, they are actually asking for enforceable transparency initiatives and those transparency initiatives hopefully would go to help this.

Not only is the reputation of the individual company hammered, not only is its stock hammered, but the industry itself is hammered. The vast majority of companies that wish to operate by internationally recognized standards of corporate social responsibility are also getting hammered and they have difficulties getting out their message that they operate ethically, transparently and in a corporately social responsible fashion. Therefore, the company is being hammered, the stock is being hammered, the industry is being hammered and, in addition, we have our national reputation being hammered.

The parliamentary secretary pulled out some quote and talked about how our nation still had a good reputation and things of that nature. That is not due to anything that the Conservatives have done, but I think he is living in a bit of a la-la land because we actually have had a reputational decline and that is very difficult to recover. Those who conduct these surveys have noted that the loss of reputation is very difficult to reverse. The government has made some efforts. This is one of the efforts.

The government has tried to repair the reputation in the extractive sector with the corporate social responsibility counsellor. After four years, and I do not know how many millions of dollars, two cases or three cases gives the appearance of doing something without actually having done anything at all. I do not know if the government has actually taken our decline in reputation seriously. This damage to our reputation is a serious issue.

The Globe and Mail published an article stating that Canada was at the lowest category of countries with little or no enforcement when it came to not initiating new measures, but applying the bribery standards set out in the Organisation for Economic Co-operation and Development. The issue is not the absence of legislation but the application of the legislation.

I am perfectly prepared to admit that this is complicated law to apply. It requires a lot of resources and we all know these resources are being stretched. Nevertheless, it seems that other nations take it far more seriously than we do.

By contrast, the U.S. has prosecuted more than 200 companies and individuals, many of them “a veritable who’s who of the corporate world”, according to Peter Dent, a partner at Deloitte Touche who sits on the board of Transparency International Canada. Then it goes on to list a number of cases, including Backfire Exploration Ltd. in Mexico, Niko Resources in Bangladesh, Nazir Karigar in India.

The numbers tell the tale. There have been 227 cases prosecuted in the United States, 135 in Germany, 35 in Switzerland, 24 in France and in Italy and the United Kingdom 18 and 17 respectively. We have two. Yet we are the nation with the greatest number of companies operating in the world in the extractive sector. We have the greatest number of companies and the best stock exchange in the world. This is where the world comes to do mining right. We have the best geologist, lawyers, financing and accounting. We have it all here and yet apparently we have no corruption whatsoever. There have been two cases prosecuted in the last number of years.

I would like the government to accompany its initiative, which is a good initiative, with real resources and the support of the sunshine bill, Bill C-474. It would provide the evidence base for the prosecutions under this initiative by the government. Bill C-474 would require each company, 180 days after its fiscal year ends, to file with the government statement with respect to each project and what payments were made to facilitate that project. Therefore, within 180 days, the governments, shareholders and NGOs would know. Obviously, management would already know because that information would be readily available to it. Then a light would be shed on that.

If I am a police officer contemplating a prosecution against a company that has “allegations” against it, the first thing I would do is look at the record of filings for company X, Y or Z to determine if it filed the previous year or the year before and what it had listed.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, we might title this day “corruption day on the Hill”. After all, for the first hour or so, we are going to be talking about Bill S-14, a bill on bribery and corruption. I dare say question period will have something to do with the other place, which might have something to do with bribery and corruption. Then we will go back to debating this bill, which is clearly about bribery and corruption. Then we will be on to debating my sunshine bill, which is also about bribery and corruption. I would say that this is corruption day on the Hill.

I take note of the irony, as has my colleague, but there is also a double irony going on here. The government's position is that it wants us to support Bill S-14, which we both agree is a good idea. However, when it comes to actually generating evidence that would support prosecutions under Bill S-14 the government does not want Bill C-474 to pass or to see the light of day.

It is great to say that we have all this great law, but it is utterly useless if in fact we cannot generate the evidence.

I am quoting from what the parliamentary secretary seems to be fond of quoting from:

Transparency International, a group that monitors global corruption, put Canada in the lowest category of countries with “little or no enforcement” when it comes to applying bribery standards.

And also:

By contrast, the United States has prosecuted more than 200 companies and individuals, many of them “a veritable who’s who of the corporate world”.

My question is very simple. What is the use of Bill S-14 if in fact Bill C-474 does not pass and if in fact there are no resources available to the RCMP?

Transparency of Payments Made by Mining, Oil and Gas Corporations to Foreign Governments Act

[John McKay, Liberal, Scarborough—Guildwood, ON]

moved for leave to introduce Bill C-474, An Act respecting the promotion of financial transparency, improved accountability and long-term economic sustainability through the public reporting of payments made by mining, oil and gas corporations to foreign governments.

Mr. Speaker, thank you for reading out the very extended name of that bill. We are calling it, for want of a better term, the sunshine bill, because it is intended to shine a light on the whole business of murky payments that go on in some transactions with respect to the obtaining and retaining of mining licences.

The bill needs to be situated in a worldwide effort to deal with some of these more odious practices that mining companies find themselves in. In particular, the U.S. has passed legislation called the Cardin-Lugar amendment, which is based upon the Dodd-Frank bill. It essentially says that these payments need to be disclosed to the Securities and Exchange Commission, and if they are not disclosed, then that company would be delisted from U.S. stock exchanges.

The U.K., the EU, Australia and others are trying to engage in this international effort, so the bill is to be situated in that entire international effort to close these loopholes and to deal with these kinds of practices.

I look forward to the debate and I look forward to support from my colleagues.

(Motions deemed adopted, bill read the first time and printed)